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Drywave Technologies USA, Inc v. Message International, Ltd.

United States District Court, D. Colorado

March 28, 2018

DRYWAVE TECHNOLOGIES USA, INC., Plaintiff,
v.
MESSAGE INTERNATIONAL, LTD., KENT MOERK, RICHARD SMEE, and JOSEPH MCGOWAN, Defendants, and KENT MOERK, RICHARD SMEE, and JOSEPH MCGOWAN, Counterclaim Plaintiffs, and DRYWAVE SPECIAL PURPOSE FUND LLC, Intervening Plaintiff,
v.
DRYWAVE TECHNOLOGIES USA, INC., DRYRX LLC, STEVE HOWE, NICKOLAY KUKEKOV, and TODD HOWE, Counterclaim Defendants.

          OPINION AND ORDER ON MOTION TO DISMISS COUNTERCLAIMS

          Marcia S. Krieger Chief United States District Judge

         THIS MATTER comes before the Court on a Motion to Dismiss Counterclaims (# 96), Response (# 99), and the Reply (# 100).

         I. JURISDICTION

         The Court has jurisdiction to hear this case under 28 U.S.C. § 1332.

         II. BACKGROUND

         Drywave Technologies USA Inc. (Drywave) was a startup company that made deep-tissue massage beds. This controversy is between two groups that tried to determine its future. The Plaintiffs/Counterclaim-Defendants are Drywave and its original officers and directors (the Drywave parties), as well as DryRX LLC, an entity owned by Todd Howe. The Defendants/Counterclaim-Plaintiffs are Joseph McGowan and fund he created - Drywave Special Purpose Fund (DSPF), which provided funding to Drywave - and Moerk and Smee, who invested time as consultants and employees of Drywave (the Investors).

         According to the Amended Complaint (#14), as a condition of funding, McGowan required Drywave to hire certain employees or board members. Drywave contends that the Investors conspired to interfere with Drywave's business.

         According to the Counterclaims (# 89), [1] the Investors were misled in making investments in and in accepting employment by Drywave based upon misleading financial information and false promises of future compensation made by Drywave's officers and directors Nickolay Kukekov, Steve Howe, and T. Howe. Ten Counterclaims are brought:

(1) fraudulent misrepresentation (DSPF, Moerk, and Smee v. Drywave, S. Howe, and Kukekov);
(2) negligent misrepresentation (DSPF, Moerk, and Smee v. Drywave, S. Howe, and Kukekov);
(3) securities fraud under C.R.S. § 11-51-501 (DSPF v. Drywave, S. Howe, and Kukekov);
(4) securities fraud under Section 10(B) of the Exchange Act (DSPF v. Drywave, S. Howe, and Kukekov);
(5) breach of contract (Smee v. Drywave);
(6) breach of contract (Moerk v. Drywave);
(7) abuse of process (all Investors v. Drywave, S. Howe, and Kukekov);
(8) breach of promissory notes and standstill agreement (DSPF v. Drywave);
(9) fraudulent transfer (DSPF, Moerk, and Smee v. all Drywave ...

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